Who Can Claim Itemized Deductions After a Divorce or Legal Separation?

When you are married as of the last day of the tax year, you can file your U.S. income tax return using the married filing jointly status or the married filing separately status, whichever is the most beneficial from an overall tax perspective. If you file jointly you can claim either the standard deduction or you can itemize deductions. If you are married filing separately and one spouse itemizes deductions, the other spouse must also itemize.

If you are divorced or legally separated as of the last day of the tax year, each former spouse must file as either single or head of household, if the requirements are met for that status. In this case each former spouse can claim either the standard deduction or itemize deductions. Questions may arise as to who can claim what deductions if one or both spouses itemize.

Generally, each former spouse could claim the itemized deductions he or she actually paid. And expenses paid from a joint account would be deductible in equal parts by each former spouse. But there are some special rules, and the provisions of the divorce decree or legal separation agreement would have to be taken into consideration.

Home mortgage interest and real estate taxes are commonly two of the most significant itemized deductions. For a home that is in the name of just one of the spouses, only that spouse could claim the deduction for home mortgage interest and real estate taxes for the period they are married. If the home is jointly owned and the mortgage is paid from a joint account, the deductions for mortgage interest and real estate taxes can be split equally between the spouses.

According to the IRS, if a divorce or separation agreement requires one spouse to pay the mortgage interest on a home that is jointly owned, part of the payment of the interest may be considered alimony. The former spouse who pays the mortgage interest could deduct half the amount as alimony and the other half as an itemized deduction for home mortgage interest. The other former spouse would have to include half the amount as income from alimony but may also be able to claim an itemized deduction for half the mortgage interest and real estate taxes.

Alimony paid is a deduction in determining adjusted gross income and can be claimed whether or not you itemize deductions.

If as part of the divorce decree or legal separation agreement your spouse lives in a home that you own individually, you can claim the mortgage interest and taxes as itemized deductions but not as alimony.

If you are responsible for the mortgage payments, real estate taxes and insurance on a home owned by your former spouse, you can deduct the payments as alimony. Your former spouse would have to report the payments as alimony income and could claim an itemized deduction for the real estate taxes and the mortgage interest if the home qualifies.

The IRS indicates that if you take out a loan to acquire the interest of your former spouse in a home because of a divorce or legal separation, that loan qualifies as home acquisition debt. So the interest on that loan would be deductible as home mortgage interest.

Medical expenses could constitute another significant itemized deduction. According to the IRS, if medical expenses are paid from a joint checking account, each former spouse could claim half the expenses. Each former spouse could also deduct the medical expenses paid separately for him or her, for the other spouse, and for dependents. To include medical expenses paid for your spouse, you must have been married at the time the medical services were received or when the expenses were paid.

If as part of the divorce or legal separation agreement you are required to pay your former spouse's medical and dental expenses, you can deduct those payments as alimony. Your former spouse would have to report the payments as income but could claim an itemized deduction for the medical and dental expenses.

For other itemized deductions, such as charitable contributions, you would generally be able to claim the expenses you paid individually and half the expenses that were paid from a joint account while you were married.

Sources:

Publication 502, Medical and Dental Expenses, IRS

Publication 504, Divorced or Separated Individuals, IRS